FX round-up: Dollar weakness ahead of FOMC
On Tuesday the US dollar weakened in the run-up to the US Federal Reserve’s policy meeting, on the next day, not to mention the US Department of Commerce’s first stab at how quickly America’s economy grew in the first quarter.
Euro/dollar was up by 0.86% to 1.0971.
Goldman Sach’s chief economist Jan Hatzius told German daily Handelsblatt he sees a steady fall in euro/dollar.
Back in the States, the Conference Board’s barometer of US consumer confidence fell to a reading of 95.2 in April from 101.4 in the month before (consensus: 102.2).
Inflation expectations looking twelve months ahead fell to 4.8% from 5.2%, to their lowest level since February 2007.
Acting as a backdrop, the situation in Greece was not far from investors’ minds. On the one hand, Greek Prime Minister Alexis Tsipras warned he would convoke a referendum if international creditors persisted in calling for what he termed as a “vicious circle of austerity”.
“If the solution goes beyond our mandate, it will have to be endorsed by the people,” he told Star Television in an interview.
Cable ended the day higher by 0.73% to 1.5335.
That came despite news that the UK’s gross domestic product (GDP) slowed to a 0.3% quarter-on-quarter clip in the first three months of the year, from a 0.5% pace in the fourth quarter (consensus: 0.6%), as the rate of expansion in the services sector slowed sharply, the Office for National Statistics (ONS) said.
The index of services, which is also published by ONS, slowed to a 0.3% month-on-month pace in February, from 0.8% in January (consensus: 0.7%).
Dollar/yen slipped 0.20% to reach 118.85 ahead of Thursday’s Bank of Japan semi-annual Outlook report.